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Esprit (330) is showing signs of a rebound. After falling 73 per cent last year, the stock has risen 41 per cent so far this year.

The turnaround is largely thanks to an HK$18.5 billion restructuring of Esprit's business - involving a revitalisation of its stores, marketing and designs - that was mapped out in September. The firm has since made a number of changes: chief financial officer Chew Fook-aun resigned in December and, in January, Esprit announced the hiring of the well-regarded Melody Harris-Jensbach from Puma sportswear as its chief product and design officer.

In November, it announced that Holly Li, formerly of Adidas, would take over as the chief executive of China operations.

Most recently the firm has revealed it will be shutting its unprofitable North American stores to better focus on its ambition to double its sales in China over the next four years, to HK$6 billion. The firm is also establishing a design hub in China to cater to Chinese tastes.

Esprit is also a high beta stock that has benefited from an overall rebound in the Hang Seng Index. Furthermore, as more than 80 per cent of its sales are in the euro zone, it has likewise been helped by recent progress seen in resolving the region's sovereign debt crisis.

Tanuj Shori (Nomura) has been neutral on the stock since initiating coverage five months ago. He says the firm has put in place a very efficient management team but believes it will take two to three quarters to see evidence that its restructuring is working.

In particular, Shori wants to see how Esprit does with its product revamp.

He says the closure of its North American stores should not have much of an impact on its share price, as this was long expected. Nevertheless, he says, 'Esprit looks cheap by any metric you look at.'

Daniel Wong (Oriental Patron) says Esprit's restructuring is a four-year process that will involve large capital expenditure and operating costs. He acknowledges that does not make a good case for near-term investment.

Nevertheless, he says: 'The share price has gone down a lot in the past four years. They have a very low price/earnings ratio, and the brand still has relevance. With this low valuation, the bottom side risk is limited.'

Wong says Esprit will be investing heavily on brand building and expansion into China.

The views stated here are those of analysts and are not stock calls by the South China Morning Post